Covid 19 Economic Effect
Realestate.com.kh publishes the annual Cambodia Investment Guide to give buyers, developers, and other investors a grasp of the current state and trends of the real estate market. We begin our data collection and start writing the annual investment guide in the latter part of the year. A draft is then submitted for final review and publication by early February the following year. Under normal circumstances, this process would have been marked as completed in our pipeline.
But 2020 did not pan out the way anyone had anticipated.
Due to the global outbreak of COVID-19 in mid-January 2020, several major economies such as China and the United States have implemented quarantines and restrictions on international travel. The still-unknown effects of these quarantines, and how the international market will proceed has created a sense of uncertainty in terms of global trade - a network the Kingdom of Cambodia has increasingly been part of. Given the situation, some data graphs and economic projections expressed in this guide may have to be scaled back.
As of writing this preface, the industry hardest hit by the quarantines is Cambodia’s tourist industry. Government figures already put tourists numbers decreasing by more than 60% compared to 2019’s figures. Its larger effects, however, are still to be determined. It is expected that hotels, travel agencies, and other directly related industries will continue to experience slowdowns while policies from infected countries around the world (especially China) are in place discouraging or outright preventing people from traveling abroad. In response, the government has announced a 4-month waiver on taxes from hotels in major tourist areas.
Its effects on the real estate sector are still largely unknown. Delivery of raw materials for construction may face delays and potential investors may postpone or cancel trips altogether in the fear of catching the disease along the way. Only time will tell how the real estate market will come out.
On the homefront, the Cambodian government has reportedly prepared a $2-billion war chest to combat any effects Covid-19 may have on the economy. As of writing, the government has projected that the 7.1% GDP growth for 2020 will be scaled down to 6% due to the slowing of economic activity.
In light of the outbreak, we suggest framing the information you may see in the Cambodia Investment Guide 2020 within the context of these developments. This online version will be updated periodically.
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